What is a GST Exemption?
A GST exemption signifies that a particular good or service is entirely excluded from the Goods and Services Tax (GST) levied by the government. This means no GST applies to its sale, purchase, or consumption.
Types of Exemption in GST
- Conditional Exemption: This exemption is subject to specific conditions or limitations. Meeting these criteria is necessary to avail of the exemption.
- Partial Exemption: Only a portion of the good or service is exempt from GST. The remaining portion is taxable.
- Absolute Exemption: This indicates a complete exemption from GST without any conditions or restrictions.
What is an Exempt Supply under GST?
An exempt supply is a transaction where the supply of goods or services is outside the scope of GST. It differs from zero-rated and nil-rated supplies:
- Zero-rated supply: These are taxable supplies at a zero GST rate, meaning that no GST is charged, but the supplier can claim input tax credit.
- Nil-rated supply: These are supplies that are exempt from central GST (CGST) and state GST (SGST) but may be liable for integrated GST (IGST).
- Non-GST supply: These are supplies that fall outside the purview of the GST law altogether.
- Exempt: No GST is applicable, and no input tax credit can be claimed.
List of GST Exemptions
1. GST Exemption for Start-ups and Small Businesses
Certain start-ups and small businesses may qualify for GST exemptions under specific conditions and turnover limits.
2. GST Exemption from Registration
Businesses with an annual turnover below the GST registration threshold are exempt from registration and GST liability.
3. Exempted Services under GST
The following services are commonly exempt under GST:
- Services relating to the agricultural sector, including services provided by farmers of farming operations.
- Services provided by a registered person to a non-resident taxable person, except for the import of services.
- Services rendered by a government entity free of charge to the general public.
- Services concerning the construction of affordable housing.
- Services relating to the healthcare sector, including services provided by hospitals, clinics, and nursing homes.
- Services relating to education, including services provided by schools, colleges, and universities.
4. Exempted Goods under GST
The list of exempted goods is extensive and covers various categories, including:
- Live animals (except horses)
- Fresh meat, fish, eggs
- Milk and milk products (with exceptions)
- Fresh fruits and vegetables
- Cereals, pulses, and flour
- Oilseeds and their products
- Medicinal plants
- Fertilizers
- Handloom products
- Newspapers and books
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5. List of Goods & Services Exempt Under GST with HSN Codes
Chapter 1: Live Animals
All goods other than live horses
- 0101: Live asses, hinnies and mules
- 0102: Live bovine animals
- 0103: Live swine
- 0104: Live goats and sheep
- 0105: Live poultry, like fowls of the species Gallus domesticus, geese, ducks, guinea fowls, and turkeys
- 0106: Other live animals like birds, mammals, insects
Chapter 2: Meat and Edible Meat Offal
All goods other than in frozen state and stored in unit containers
- 0201: Meat of bovine animals, chilled or fresh
- 0203: Meat of swine, chilled or fresh
- 0204 Meat of goats or sheep, chilled or fresh
- 0205: Meat of horses, mules, asses, or hinnies, chilled or fresh
- 0206: Edible offal of bovine animals, goats, swine, asses, sheep, horses, hinnies or mules, chilled or fresh
- 0207: Meat and edible offal of the poultry of heading HSN code number 0105, chilled or fresh
- 0208: Other meat and edible meat offal, chilled or fresh
- 0209: Pig fat, free of lean meat and poultry fat, not rendered or otherwise extracted, chilled or fresh
Chapter 3: Dairy, Natural Honey, Bird’s Eggs, Edible Products of Animal Origin, Not Specified Elsewhere
Fish, mollusks, crustaceans, and other aquatic invertebrates (prawn/shrimp seeds/fish seeds, whether or not processed, cured, or in the frozen state, and all goods, other than processed, cured, or in the frozen state
- 0301: Live fish
- 0302: Fish, chilled or fresh, not inclusive of fish fillets & other fish meat of heading HSN code number 0304
- 0304: Fish fillets and other fish meat, whether or not minced, chilled or fresh
- 0306: Crustaceans, whether in shell or not, live, chilled or fresh; crustaceans, in shell, cooked by steaming or by boiling in water, chilled
- 0307: Molluscs, whether in a shell or not, live, fresh, chilled; aquatic invertebrates other than crustaceans and molluscs, live, fresh, chilled
- 0308: Aquatic invertebrates other than crustaceans and molluscs, live, chilled, or fresh
Chapter 4: Dairy, Natural Honey, Bird’s Eggs, Edible Products of Animal Origin, Not Specified Elsewhere
- 0401: Fresh milk and pasteurized milk, inclusive of separated milk, milk, and cream, not concentrated nor containing added sugar or other sweetening matter, not including Ultra High Temperature (UHT) milk
- 0403: Curd, lassi, buttermilk
- 0407: Eggs Birds’ eggs, in shell, fresh, preserved, or cooked
- 0406: Chena or paneer, other than put up in unit containers and bearing a registered brand name
- 0409: Natural honey, other than put up in the unit container and bearing a registered brand name
Chapter 5: Products of Animal Origin, Not Elsewhere Included or Specified
- 0501: Human hair, unworked, whether or not washed or scoured; waste of human hair
- 0511: Semen inclusive of frozen semen
Chapter 6: Live Trees and Other Plants, Roots, Bulbs, etc.; Ornamental Foliage and Cut Flowers
- All goods under this chapter
Chapter 7: Edible Vegetables, Roots and Tubers
Fresh vegetables, roots, and tubers other than those in frozen or preserved state
- 0701: Potatoes, chilled or fresh
- 0702: Tomatoes, chilled or fresh
- 0703: Onions, garlic, shallots, leeks, and other alliaceous vegetables, chilled or fresh
- 0704: Cabbages, kale, kohlrabi, cauliflowers, and similar edible brassicas, chilled or fresh
- 0705: Lettuce (Lactuca sativa) and chicory (Cichorium spp.), chilled or fresh
- 0706: Turnips, salsify, carrots, salad beetroot, radishes, celeriac & similar edible roots, chilled or fresh
- 0707: Gherkins and cucumbers, chilled or fresh
- 0708: Leguminous vegetables, unshelled or shelled, chilled or fresh
- 0709: Other vegetables, chilled or fresh
- 0712: Dried vegetables, sliced, broken, cut, whole or in powder, but not further prepared
- 0713: Dried leguminous vegetables, shelled, whether or not split or skinned, apart from those stored in a unit container and having a registered brand name
- 0714: Salep, manioc, Jerusalem Artichokes, arrowroot, sweet potatoes, and similar tubers and roots with high insulin or starch content, chilled or fresh; sago pith0
Chapter 8: Edible Fruit and Nuts; Peel of Citrus Fruit or Melons
Fresh fruits other than in a frozen state or preserved
- 0801: Coconuts, dried or fresh, whether or not peeled or shelled
- 0802: Other nuts, fresh such as almonds, hazelnuts or filberts (Coryius spp.), walnuts, chestnuts (Castanea spp.), pistachios, macadamia nuts, kola nuts (Cola spp.), areca nuts
- 0803: Bananas, inclusive of plantains, fresh or dried
- 0804: Dates, figs, pineapples, avocados, guavas, mangoes and mangosteens, fresh
- 0805: Citrus fruit, like mandarins and oranges, inclusive of satsumas and tangerines; Wilkins, clementines, and similar citrus hybrids; grapefruit, inclusive of lemons, pomelos (citrus limonum, citrus lemon) and limes (citrus latofolia, citrus aurantifolia), fresh
- 0806: Grapes, fresh
- 0807: Melons (inclusive of watermelons) and papaws (papayas), fresh
- 0808: Apples, quinces and pears, fresh
- 0809: Apricots, peaches, cherries (inclusive of nectarines), sloes and plums, fresh
- 0810: Other fruit such as mulberries, strawberries, blackberries, raspberries and loganberries, red, black, or white currants and cranberries, gooseberries, bilberries and other fruits of the genus Vaccinium, durians, kiwi fruit, pomegranates, persimmons, sapota (chico), tamarind, custard-apple (ata), litchi, bore, fresh
- 0814: Peel of citrus fruit or melons (inclusive of watermelons), fresh
Chapter 9: Coffee, tea, mate, and spices
All goods of seed quality
- 0901: Coffee beans, not roasted
- 0902: Unprocessed green leaves of tea
- 0910: Fresh ginger and fresh turmeric, other than in processed form
Chapter 10: Cereals
All goods, other than those put up in unit containers and bearing a registered brand name
- 1001: Wheat and meslin
- 1002: Rye
- 1003: Barley
- 1004: Oats
- 1005: Maize (corn)
- 1006: Rice
- 1007: Grain sorghum
- 1008: Buckwheat, canary, and millet seed; other cereals such as jawar, bajra, ragi
Chapter 11: Products of Milling Industry; Starches; Wheat Gluten; Malt; Inulin
1101, 1102, 1105, 1106 (Flour): Aata, maida, besan, etc., apart from those stored in unit containers and having a registered brand name
- 1101: Wheat or meslin flour
- 1102: Cereal flours other than wheat or meslin, i.e., rye flour, maize (corn) flour, etc.
- 1103: Cereal groats, meal, and pellets, apart from those stored in unit containers and having a registered brand name
- 1105: Flour of potatoes
- 1106: Flour of the dried leguminous vegetables of heading HSN code number 0713 (pulses), of sago or of roots or tubers of heading HSN code number 0714 or of the products of Chapter 8 i.e. of mango flour, tamarind, singoda, etc.
Chapter 12: Oil Seeds and Oleaginous Fruits, Fruits and Seeds; Straw and Fodder; Medicinal or Industrial Plants; Miscellaneous Grains
All goods of seed quality
- 1201: Soya beans, whether or not broken
- 1202: Groundnuts, not roasted or otherwise cooked, whether or not shelled or broken
- 1204: Linseed, whether or not broken
- 1205: Rape or colza seeds, whether or not broken
- 1206: Sunflower seeds, whether or not broken
- 1207: Other oil seeds and oleaginous fruits (i.e. palm nuts and kernels, castor oil seeds, cotton seeds, sesamum seeds, saffower (Carthamus tinctorius) seeds, mustard seeds, melon seeds, ajams, mango kernel, poppy seeds, Niger seed, kokam, whether or not broken.
- 1209: Seeds, fruit, and spores of a kind used for sowing
- 1210: Hop cones, fresh
- 1211: Plants and parts of plants (inclusive of seeds and fruits) of a kind, used primarily in perfumery, in pharmacy, or for insecticidal, fungicidal, or similar purposes, chilled or fresh
- 1212: Locust beans, seaweeds, and other algae, sugar beet and sugar cane, chilled or fresh
- 1213: Cereal straw and husks, unprepared, whether or not chopped, ground, pressed, or in the form of pellets
- 1214: Swedes, fodder roots, mangolds, hay, clover, forage kale, lucerne (alfalfa), lupines, sainfoin, vetches, and similar forage products, whether or not in the form of pellets
Chapter 13: Lac, Resins, Gums and Other Vegetable Extracts and Saps
- 1301: Lac and shellac
Chapter 14: Vegetable Plaiting Materials; Vegetable Products, Not Elsewhere Included or Specified
1404: Betel leaves
Chapter 17: Sugar and Sugar Confectionery
1701: Cane jaggery
Chapter 19: Preparations of Cereals, Starch, Flour or Milk; Pastry Cooks’ Products
- 1904: Puffed rice, commonly known as Muri, flattened or beaten rice, commonly known as Chira; parched rice, commonly known as Khoi; parched paddy or rice coated with sugar or gur, commonly known as Murki
- 1905: Pappad, by whatever name it is known, except when served for consumption, and bread (branded or otherwise), except when served for consumption, and pizza bread
Chapter 21: Miscellaneous Edible Preparations
2106: Prasadam supplied by places of worship, such as temples, churches, dargahs, mosques, gurudwaras, etc.
Chapter 22: Beverages, Spirit and Vinegar
2201: Water other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized, and water sold in a sealed container
2201: Non-alcoholic Toddy, Neera
2202: Tender coconut water stored in a unit container and having a registered brand name
Chapter 23: Residues and Waste from the Food Industries; Prepared Animal Fodder
2302, 2304, 2305, 2306, 2309: Aquatic feed, cattle feed, and poultry feed, inclusive of straw, grass and hay, husk and supplement of pulses, additives and concentrates, wheat bran, and de-oiled cake
Chapter 25: Salt; Sulphur; Stone and Earths; Plastering Materials, Cement and Lime
2501: Common salt, inclusive of iodized and other fortified salts, kala namak, sendha namak [rock salt]
Chapter 30: Pharmaceutical Products
3002: Human blood and its components
3006: All kinds of contraceptives
Chapter 31: Fertilizers
Organic manure, apart from that stored in unit containers and having a brand name
Chapter 33: Essential Oils and Resinoids Perfumery, Toilet or Cosmetic Preparations
3304: Kumkum, sindur, bindi, alta
Chapter 38: Miscellaneous Chemical Products
Municipal waste, clinical waste, sewage sludge
Chapter 39: Plastics and Articles Thereof
Plastic bangles
Chapter 40: Rubber and Articles Thereof
4014: Condoms and Contraceptives
Chapter 44: Wood and Articles Thereof, Wood Charcoal
4401: Fuel wood or firewood
4402: Wood charcoal, inclusive of nut or shell charcoal, whether or not agglomerated
Chapter 48: Paper and Paperboard; Articles of Paper Pulp, of Paper or Paperboard
4802, 4817: Judicial, non-judicial stamp papers, court fee stamps when sold by the Government Treasuries or vendors authorized by the Government, postal items, such as postcards, envelopes, etc., sold by the Government, rupee notes when sold to the Reserve Bank of India & cheques, loose or in book form
Chapter 49: Printed Books, Newspapers, Pictures and Other Products of the Printing Industry, Typescripts, Manuscripts and Plans
4901: Printed books, inclusive of braille books
4902: Newspaper, periodicals, and journals, whether or not illustrated or containing advertising material
4905: Maps and hydrographic or similar charts of all types, inclusive of atlases, globes, topographical plans, and wall maps, printed
Chapter 50: Silk
5001: Silkworm laying, cocoon
5002: Raw silk
5003: Silk waste
Chapter 51: Wool, Coarse or Fine Animal Hair, Horse Hair Yarn and Woven Fabric
5101: Wool, not combed or carded
5102: Coarse or fine animal hair, not combed or carded
5103: Waste of wool or coarse or fine animal hair
Chapter 52: Cotton
Khadi yarn, Gandhi topi
Chapter 53: Other Vegetable Textile Fibres; Paper Yarn, Woven Fabrics of Paper Yarns
5303: Jute fibers, processed or raw but not spun
5305: Coconut, coir fiber
Chapter 63: Other Made-Up Textile Articles, Sets, Worn Textile Articles, and Worn Clothing; Rags
Indian National Flag
Chapter 69: Ceramic Products
6912: Clay lamps and earthen pots
Chapter 70: Glass and Glassware
7018: Bangles, apart from those made from precious metals
Chapter 82: Tools, Cutlery, Forks and Spoons of Base Metal, Implements; Parts Thereof of Base Metal
8201: Agricultural implements, animal-driven or manually operated, and hand tools, like shovels, hoes, spades, picks, mattocks, rakes and forks; bill hooks, axes and similar hewing tools; pruners and secateurs of any type; timber wedges, scythes, hay knives, sickles, hedge shears, and other tools of a kind used in forestry, agriculture or horticulture
Chapter 84: Boilers, Nuclear Reactors, Machinery, and Mechanical Appliances; Parts Thereof
Handloom
Chapter 88: Aircraft; Spacecraft and Parts Thereof
8802: Spacecraft, inclusive of satellites and suborbital and spacecraft launch vehicles
8803: Parts of Goods of Heading HSN Code Number 8801
Chapter 90: Photographic, Cinematographic, Optical, Checking, Measuring, Precision, Surgical or Medical Apparatus and Instruments; Parts and Accessories Thereof
9021: Hearing Aids
Chapter 92: Musical Instruments; Accessories and Parts of Such Articles
Indigenous handmade musical instruments
Chapter 96: Miscellaneous Manufactured Articles
9609: Slate pencils and chalk sticks
9610: Slates
All of the goods mentioned above are exempt from GST.
Reasons for Exemption under GST
The government may exempt certain goods and services for various reasons, including:
- Essential commodities: To ensure affordability and accessibility for the standard population.
- Social welfare: Supporting sectors like agriculture, education, and healthcare.
- Economic growth: Promoting specific industries or regions.
- International obligations: Complying with international trade agreements.
